OA rescue plan calls for private cash

Olympic Airways will be restructured with private funds and the State retaining only a minority interest in the revamped airline, Transport and Communications Minister Christos Verelis announced yesterday. Verelis and Economy and Finance Minister Nikos Christodoulakis met with Prime Minister Costas Simitis and presented him with a restructuring plan for the ailing airline, after a tender for the sale of a majority stake collapsed last Friday due to the remaining bidder’s inability to come up with 102 million euros as a guarantee. The Inner Cabinet is expected to meet today and approve the restructuring plan. The government is likely to split Olympic’s flight operations from the rest of its activities, such as catering, ground handling and technical maintenance. A curtailment of the flight schedule and layoffs also appear inevitable if the cash-strapped company is to keep operating. Asked about funds for the restructuring, Verelis said that «(privatization) advisers (Credit Suisse First Boston) will take the initiative in coming up with private funds. The majority of funds in the creation of the new Olympic will be private, and the Greek State will retain a minority stake.» The State has spent close to 1 trillion drachmas (2.93 billion euros) over the past seven years in, ultimately failed, attempts to put Olympic on its feet. The European Commission is expected next Wednesday to launch an inquiry into allegations of illegal subsidies, in the form of fuel discounts, special tax breaks and discounts on Value Added Tax.

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